Medical device spending stuck in the 1990's

SAN JOSE, Calif. – Since 1992, the U.S. has consistently spent about 6 percent of its national health care funds on medical devices, according to a med tech lobbying group in a report designed to seek the repeal of a device tax contained in health care reform legislation.

Prices for medical technology grew at less than half the rate of overall prices in the economy and only one-fifth the rate of prices for other medical goods and services, concludes the the study by the Advanced Medical Technology Association (AdvaMed).

From 1989 to 2010, spending on medical technology as a percent of total health care spending rose from 5.3 percent in 1989 to 6 percent in 2010. Most of the 0.7 percent growth came between 1989 and 1992.

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While medical device spending has remained constant at about 6 percent of national health care spending, the report found that in 2010, the last year studied, that spending on medical devices and in-vitro diagnostics totaled $156.3 billion. “Unlike other areas of health care, the prices of medical devices have been growing much more slowly,” said Ann-Marie Lynch, AdvaMed’s executive vice president for payment and health care delivery policy.

Over the past 21 years, device and diagnostic prices have increased at an average annual rate of one percent, compared to the overall Consumer Price Index increase of 2.7 percent, the Medical Care CPI increase of 4.7 percent and the Medical Care Services CPI increase of five percent.

“We are proud of the value we deliver as an industry to patients worldwide and look forward to sharing the results of this new study with Members of Congress and other policymakers as they consider changes to the health care delivery and payment system in the United States,” said Lynch.

Sweeping health care reform legislation passed last year included a provision for a new tax on medical devices to help extend coverage to more Americans.

While sales costs have remained flat, the manufacturers are trying to make it up in life cycle costs by staying stuck in the pre-Reliability Centered Maintenance mindset. That would be the "manufacturer knows best, so you'd better pay us for service" model.
Rather than working with the hospital techs that really understand the proper failure issues, they spred fear uncertainty and doubt to the clinicians. This leds the hospitals to waste limited patient care money on unneeded maintenance.